Peter Koeppel is the President and Founder of Koeppel Direct, a leader in (DRTV) direct response television, online, print and radio media buying, marketing and campaign management.
Tuesday, January 05, 2010
Video Games Get Strafed by the Economy
The video game industry was seemingly immune to the economic downturn, rising ever higher while other businesses were feeling the ground bottoming out underneath them so quickly they could hear the wind whistling past. In January alone, sales jumped 10%, and games often retail for as much as $70 or more.
However, since March, video games have been seeing a steady decline – and in July, they got the chance to feel what it was like to have the ground go out from under them.
Video game sales dropped off by a whopping 29% from last year’s sales, and hardware sales fared even worse, plunging 38%. The Wii sales for Nintendo did particularly poorly, and game retailers and publishers like GameStop Corp, Electronic Arts Inc. and Activision Blizzard Inc. are all expected to show equally dim numbers in their earnings.
The video game industry had previously hoped to boast double-digit revenue growth this year while other industries flagged, but now they’re hoping simply to break even or slightly better.
One of the problems, analysts say, is consumers being unwilling to buy pricey new games and consoles when those same items will inevitably drop in price as time goes by. Digitally downloaded games are also a culprit, since many new games cost nothing and are offered in a huge variety of choices, like the applications for the iPhone.
Though all of this looks pretty grim, the video game industry is still faring better than others in the current recession, perhaps in part because Americans are needing new sources of entertainment as jobs drop off. Video games provide hours of distraction, and at a time when no one wants to face the harsh reality, that’s a service that’s in demand.
Sunday, November 22, 2009
Wal-Mart Turns Up the Power on Marketing
Wal-Mart has been one of the companies to benefit from the recession.
As more consumers look for budget-friendly replacements for their pricey expenditures, Wal-Mart became a good place to look for a deal. The same qualities that made Wal-Mart a haven for the lower-income bracket were now the same qualities that middle- and even upper-income bracket Americans were looking for as the recession emptied their bank accounts.
They may have gotten a good boost as Americans began to worry more about their pocketbooks than their pride, but Wal-Mart isn’t resting on its laurels. As there are rumors the recession is beginning to turn a corner, they’re worried about holding on to that new class of customers who may once again turn up their noses at a bargain if it’s still wrapped in lower-class packaging.
To that end, Wal-Mart is starting to appeal to the sentimentalist in its consumers. Its new campaign is built around the tagline, “Save money. Live better” and it’s designed to appeal to those consumers who are grateful Wal-Mart helped them survive tough times.
They’re not counting on gratitude to hold on to everyone, though. Wal-Mart is also taking steps to look less like a discount warehouse and more like a quality chain, widening its aisles, altering the way it presents goods and products and going for a more upscale feel to its branding. We’ll see if consumers are willing to embrace the idea of a chic bargain basement when they’re back in the black.
Monday, October 19, 2009
Microsoft’s Advertising Goes on the Offensive
After a series of successful ads directed at Apple products, Microsoft is turning its attention to another huge competitor – Google. Their new search engine, Bing, is aiming to cut into Google's status as top dog of the internet world.
With its expensive - $80-$100 million – campaign, Microsoft is not holding back. A usual product campaign, by comparison, costs somewhere in the ballpark of $50 million. Consider that Google only spent about $25 million on all of its advertising last year, and you start to see why this new campaign might be causing a few furrowed brows over at Google headquarters.
Google has never experienced a direct confrontation ad campaign on this level before, and it'll be interesting to see just how much money can buy in advertising, even against a giant that seemingly can't be toppled.
The campaign is based on the simple premise that search engines aren't as good as they could be, and that users will be readily able to see the difference between Bing and the current search-engine favorite, Google.com.
For our part, we imagine Google won't be really worried until Bing gets added to the dictionary as a search-engine-related verb.
Friday, September 04, 2009
P&G's New Advertising Campaign Targets Men
P&G Wants Men to Feel Pretty Too
Or at least to be more concerned with their physical appearance. Proctor & Gamble Co. is overhauling its beauty and grooming division to put the spotlight on a sector that isn't usually targeted for that industry – men.
P&G produces Gillette razors, which are popular among men, but most of its other products have focused, until now, exclusively on women.
The idea behind the new advertising campaign
is to focus on salons and spas that cater to both sexes, getting the P&G brands into men's hands at the sources where they're most likely to be thinking about investing in their personal appearance.
P&G's new advertising campaign may not work out as well as they hope. One of the impetuses behind involving men in their beauty and grooming division was the slowing sales to women. As the economy falls, women spend less money on discretionary items and more money on the basics.
If men are making the same cutbacks, sacrificing their personal items to their dwindling budgets, this beauty campaign could turn ugly fast.
Thursday, August 27, 2009
Media buying flexibility in today's world
Media buyers think they have the upper hand heading into this year's upfront television marketplace - but they may be calling the game too soon.
While the buyers are saying they'll be seeking concessions like price rollbacks and greater flexibility on terms and options, the networks think they can play the waiting game a lot longer than the media buyers
can afford to.
At least one network, CBS, has actually said it intends to increase pricing this year. And several others have made it very clear that they don't intend to get pushed around by ad buyers, no matter how difficult the economy is.
The bottom line is that it's easier for cable networks to wait on making decisions than it is for drtv
media buyers, who have a lot of pressure to deliver the right results to their clients in a short period of time. The cable networks, even if they're currently strapped for ad buyers, know that no buyer can afford to completely eschew air time - especially when their competitors are buying it up.
Meanwhile, ad buyers are investigating other sources, including digital markets like video games. We'll see how this waiting game plays out.
Wednesday, June 10, 2009
Where are the Top Papers of the 1990s Now?
Only four newspapers have expanded their circulation in the last twenty years, including USA Today, The Wall Street Journal, the New York Post, and The Arizona Republic.
The Arizona Republic's increase is the most notable of these. It's distinct from USA Today and the Journal because it's not a national paper, nor does it have a standout marketing hook that ties in subscribers from around the United States. It also doesn't have the special status of the New York Post, which is counted as a tabloid, not necessarily a reliable news source.
The Republic has managed to make a remarkable 9% increase in its circulation at a time when even the most renowned newspapers are struggling to keep their subscriber numbers from plummeting. So what are the secrets to the Republic's success?
The Republic focuses a lot of energy on its Sunday paper, which has the double benefit of more sections to keep readers interested as well as being an excellent source of ad revenue. They've also made some judgment calls in their circulation delivery rates, including raising home delivery prices and dropping Sunday circulation to some distant areas that weren't cost-effective.
Sunday, May 17, 2009
CBS TV, Radio and Outdoor Revenues Suffer
CBS is reeling from the dismal revenues from their radio, TV stations and outdoor which resulted in a 50 percent profit decline for the fourth quarter.
CBS Corp.'s President CEO, Les Moonves, was encouraging when discussing the businesses that are non-advertising supported, which includes unspecified fees resulting from transmission content.
But in reality, the fourth quarter was the biggest hit. The ad market seemed to fail. Radio TV and outdoor advertising experienced record setting declining revenues, which only rose one percent. Now these markets face plunging revenues for radio, TV and outdoor advertising.
Affected by the recession. CBS is coming to terms with some very disappointing numbers. Revenues for TV, radio and outdoor advertising reached a record 52 percent profit decline for the fourth quarter.
Moonves says he chose to look on the bright side of things believing that it's only a matter of time before things get better, "We believe most of what we're feeling is cyclical – not secular issues – that will improve when the economy turns around."
To offset the effects of the economy, CBS slashed over $220 million in costs and staff, and 70 percent from local segments.
Thursday, April 23, 2009
Can Obama's Plan Boost Online Retail Spending?
President Obama's economic recovery plan has retail executives feeling hopeful as they struggle to stay afloat in the current economy.
Obama has said that he wants to expand the accessibility of broadband to communities that currently go without. He is also, for example, encouraging hospitals to establish a web connection with one another, which would make it much easier to share electronic medical records.
Obama's online retail challenge
This proposal alone could open up new opportunities for marketers. In order to accomplish these goals, Obama must face a very controversial issue: whether or not to provide free Wi-Fi.
Certainly, it remains to be seen how President Obama handles this with the cable and telephone companies still being healthy financially – and government intervention not being a given as in, for example, the auto industry.
What broadband expansion could do to encourage online spending
According to Pontus Kristiansson, co-founder and CEO of Avail Intelligence, a Behavior Merchandising solutions company, expanding consumer access to broadband could mean an increase an in online shopping and advertisers to reach out to.
Kristiansson also noted that there is no denying the strong connection between speed and activity when it comes to online shopping, according to surveys conducted by Forrester and other industry experts.
Saturday, March 14, 2009
Online Retailing Weathers the Economic Storm (Part 2 of 2)
Online retailers also reported high conversion rates and profits despite the many challenges that may lie ahead. The study revealed that the biggest challenges many of these businesses face is being able to sell across channels including web stores and catalogs.
That does not mean that online retailers are not struggling. Some retailers are fighting to increase sales by integrating their entire operating system, marketing and merchandising efforts to work across channels.
Online media buying is in demand since many businesses are also opting to operate their offline and online businesses as completely different entities. And 51 percent of the survey participants say that their online customers are actively pursuing at least one other retail channel.
Still, the majority of online retailers remains "cautiously optimistic" about the next 12 months. Online retailers know that there is no room for error in terms of what they need to deliver. A "quality web experience" is more important than ever, and certainly consumers, retailers and all of us will be watching closely this season.
Sunday, February 15, 2009
Online Retailing Weathers the Economic Storm (Part 1 of 2)
There is good news to report on the economic front: Many online retailers are expecting average annual growth this year of up to 35 percent.
Many online retailers predict their businesses will perform better than the first half of the year's expectations. This information is courtesy of the State of Retailing Online Profitability, Economy and Multichannel report released last month by Shop.org, an online retailing unit of the National Retail Federation.
The study was based on a survey conducted by Forrester Research, Inc. involving 125 retailers in June and July 2008, when participants were asked about their plans and expectations for the year.
Five percent of the survey's participants say they believe their online business will perform even better than expected in the following year. Thirty percent say they believe their online business growth was slightly better than expected; 33 percent said business performed as expected and 32 percent say business growth was slightly worse than expected.